Suppose the natural unemployment rate is 5 percent. Which of the following observations is consistent with an economy that is self-regulating?
A) The unemployment rate in the economy is always above 5 percent.
B) The unemployment rate in the economy is always below 5 percent.
C) There is a tendency for the unemployment rate in the economy to move toward 5 percent if it is not already there.
D) If the unemployment rate in the economy is greater than 5 percent, wages start to rise.
E) If the unemployment rate in the economy is less than 5 percent, wages start to fall.
C
You might also like to view...
Assume that Clara purchases a combination of products Y and Z such that, after she is done spending her limited income, MUy/Py = 25 and MUz/Pz= 15. Based on the equal marginal principle, Clara
A. is maximizing her total utility. B. should have purchased less Y and less Z. C. should have purchased more Y and less Z. D. should have purchased less Y and more Z.
In the prisoners' dilemma game, each player
A) has only one possible strategy. B) can choose from two strategies. C) can choose from three strategies. D) can choose from four strategies.
A system of private property rights
A. retards economic growth by serving the interests of the wealthy only. B. enhances economic growth by creating incentives for the government to sell its assets. C. retards economic growth by limiting the options of people who own nothing. D. enhances economic growth by inducing people to make capital investments today.
Two-dimensional graphs have a horizontal and a vertical axis and are used in economics to illustrate
A) relationships between two economic variables. B) one variable. C) a flow chart. D) a pie chart.